The Tooth Fairy and Reality Check

The Tooth Fairy

If you believe an analyst with Fitch Ratings agency, then you might as well believe that the Tooth Fairy wasn’t a serial killer.

The analyst: Scott Zuchorski.

Fitch: the Tooth Fairy

The situation: a Portsmouth judge ruled that tolls on the Mid-Town and Downtown Tunnels and the Martin Luther King Freeway were unconstitutional.

If Elizabeth River Crossings, the partnership between Macquarie and Skanska to construct the Mid-Town Tunnel, can’t collect tolls, the state is on the hook for $1 billion in debt, he said.

Fitch is one of the big three ratings agencies. The other two are Moodys and Standard & Poors.

They rate debt, or bonds. Get a good score from them and you pay less in interest and attract a horde of investors. Get a bad score and you pay more and investors won’t buy your debt. 

But you pay them to rate your debt. For example, Norfolk will pay them to rate the debt of its General Obligation bonds.

Yes, localities pay to have their debt rated. But the ratings agencies insist that the fees they charge don’t influence their ratings.

All three have been accused of inflating the credit worthiness of mortgage backed securities, those boutique investments invented by Wall Street and which almost brought Wall Street to its knees.

So if you believe a credit rating agency, you believe in the folkloric Tooth Fairy.

Check your Reality

Finally.

We will hear the results of a one-day love fest from last May. More than 300 people attended. They moved Legos’ around a board to determine the best and highest use of land in the region.

It was called Reality Check and was sponsored by the local chapter of the Urban Land Institute. Today, participants from last May will reconvene to “Advance the Vision” for Regional Land Use,” a statement said.

Robert Grow of Envision Utah will address the group.

He will present his model for “how the public and private sectors can collaborate, and engage with a high level panel of local decision makers on next steps.”

“Reality Check participants delivered a clear message that Hampton Roads communities need to work together in order to move forward,” says Burrell Saunders, Chairman of ULI’s District Council.

Yes, we are quite aware of that fact, Mr. Saunders. We need to work together. But can we work together?

History proves our well-intentioned motives wrong.

Reality Check is a well-intentioned exercise.

But land use, or reuse, and planning in the region are complicated issues.

Some localities have land to expand while others are faced with redeveloping land. Some are suburban while others are more urban in character, and others still retain a rural flavor.

Some municipalities buy water while others sell it, and the availability of water is an essential ingredient in the land use process in this region.

In a perfect world, the region would cooperate on land use and planning. But this isn’t a perfect world.

Reality Check is a step in the right direction.

But what is done with the results is the real test.

The findings from last year are available at http://hamptonroads.uli.org.